MFC to sell Compton Petroleums Niton, Alberta Property
Source: Sayer Energy Advisers-website:
Compton Petroleum Corporation (“Compton” or the “Company”) has engaged Sayer Energy Advisors to assist it with the sale of its liquids-rich natural gas property at Niton, Alberta (the “Property”).
In September 2012, Compton was acquired by Compton Petroleum Austria GmbH, a subsidiary of MFC Industrial Ltd., a global supply chain company listed on the New York Stock Exchange. MFC has decided to put Compton’s Niton property up for sale in order to redeploy the capital from the divestiture into its other areas.
Recent production net to Compton from the high working interest Niton property has averaged approximately 2,860 boe/d (13.5 MMcf/d of natural gas sales and 610 barrels of oil and natural gas liquids per day).
The Company has a very focused land position in the Niton area, where it holds an average working interest of 71%. The total land position, which is largely held by production, exceeds 93,000 acres (gross), 69,000 acres net.
Opportunities exist on Compton’s land in both conventional and horizontal exploitation within multiple zone targets. Compton has identified potential to drill well over 100 horizontal locations targeting natural gas and oil in at least six formations.
Very interesting.. This looks like a very substantial property for the league that Compton is in(minor). It has small but solid reserves and good upside, which potential buyers will love. They show a PV of $110 mil, but that's using a 10% discount rate, which no oil company will accept. I didn't get into the pricing assumptions, but the ugly fly in the ointment is gas pricing now and in the future and competition from the US "glut".
The sale has a short fuse - Feb 14 - so we won't have long to wait. I wouldn't be surprised if someone offers a farm-in instead of a cash purchase. Whatever. In either case, a property like this is very labor intensive, so that's another upside to the sale.
Compton management presentation from April 2012 gave a total $712m "unrisked BT NPV10" value and "unrisked total reserves" of 80.3 mmboe for Niton alone. I know the pricing of NG is lower now but aren't they leaving a lot of potential on the table by selling it for around $100m ? Or was the previous Compton valuation/reserve estimate "pie in the sky" wishful thinking by a desperate management?
Niton represents about a third of Compton's production and a quarter of reserves.
more info and a 50 pages containing pdf-ducument you can find on the sayer advisors website:
"...PROCESS & TIMELINE:
Detailed information regarding this opportunity is available at ...(SA webpage)
Sayer Energy Advisors is accepting cash offers to purchase the Property until 12:00 pm on Thursday, February 14, 2013.
Week of January 14, 2013 Preliminary Information Distributed
January 21, 2013 Data Room Opens
February 14, 2013 12:00 noon Bid Deadline
March 1, 2013 Effective Date
March 2013 Closing Date
Sayer Energy Advisors does not conduct a “second-round” bidding process; the intention is to attempt to conclude the sale
of the Property with the party submitting the most acceptable proposal at the conclusion of the process.
Sayer Energy Advisors is accepting proposals from interested
parties until noon on Thursday, February 14, 2013"
"effective date 3/1"...
I would guess that Rennie's release would be about the same time...
14 Feb. to 1 Mar allows for some pretty intense detail work preceding any public announcement...
I can't picture MS waiting 'til the Annual Report to announce whatever the final deal is gonna be.